Startup Lessons

I've wanted to start a company since I was 17 and the dot coms were still booming. Having just acquired my very first computer then, freshly addicted to slashdot and enamoured by the Internet - I whipped up a business plan with plans to present it to the only V.C. I fortuitously knew. Then the skeptic inside my head kicked in. I had just finished high school and not done that well, I had acquired my first computer a couple of months ago, I was a freshman in college and a few thousand miles away from where all the action was - who was I kidding? Myself, maybe - as Paul Graham would convince me and someone would actually implement my idea - both 5 years too late .

Since then, I've become an engineer, interned at one great startup and started working full time for another, worked in the valley, attended startup school and almost finished grad school. Over these years I've learnt a few more lessons from various sources. Here are the ones I've found to be the most valuable


1) The only value of an idea that has not been implemented is the excitement it generates inside your head


2) Before you pitch an idea, even to your friends or potential partners - do your groundwork.

Think about the idea, it's potential and it's drawbacks on your own for a couple of days before you talk to others about it. When you try to convince your first 'audience' about your idea, you are also trying to convince yourself about it and they'll be tougher critics than you. The best way to prematurely kill a smart idea is to not analyze and refine it before you pitch it and have someone, even worse yourself - give up on the idea because you couldn't counter a basic argument on the spot . If you have done your groundwork the first pitch and the ensuing discussion becomes a tool to sharpen the idea, to make it better.

3) Ideas morph, even after you start working on them - especially after you start working on them.

Flickr was born out of an online games company, Paypal was originally an app that let you send or receive money on your mobile device (and they implemented this now, several years later) and Craiglist actually started off as a weekly email to Craig's friends.

4) Getting VC funding does not mean you've succeeded - it means the stakes just got bigger for you.

This is something my CTO Paul Judge taught me. Say you are just a two person startup - at that point your investment in the startup is the effort you've put into it, the opportunity cost in an engineer's salary that you may have let go while working on it and your emotional investment in the idea. If for some reason it doesn't work out, you can still walk off with what may be a fair trade in the knowledge you've acquired trying to make the idea work. The moment you get X million in VC funding - that is a debt that you've taken on. Your responsibilities just rocketed the moment you got that money. This may not be the dominant reaction to receiving funding but it is neverthless true. If you don't recognize this and don't spend every dollar of this money more responsibly than if it were your own - you'll lose not just the time and effort you invest in the idea but also your credibility to future investors in your future ideas, an opportunity cost of millions of dollars in profits, if not more and perhaps your confidence in yourself as an entrepreneur.

5) Everything Olin Shivers said in this presentation at Startup School. Seriously.


(This will be a continuing series as I add more and more ideas that I find valuable here)